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SA’s economic transactional activity picks up in July – BankservAfrica

11 August 2017BankservAfrica

Latest index shows annual pick up augmented by low-growth economy.

For the first time in 10 months, economic transactional activity in South Africa picked up in real terms on a year-on-year basis in July due to weaker inflation, according to the latest BankservAfrica Economic Transactions Index (BETI). However, the index reflected slow growth on the quarterly and monthly basis.

The monthly transactional activity – as measured by BankservAfrica’s national payment system - for July showed a 0.6% year-on-year increase in the actual value of transactions.

“This change is the result of a very weak July 2016 which saw the transaction values fall out of the current annual numbers. Therefore, the annual increase is a ‘base effect’ that lifts the actual index numbers above last year’s lows,” explained Mike Schüssler, Chief Economist at Economists dotcoza.

The quarterly numbers are negative due to the very low May 2017 BETI numbers, and follows from the sovereign credit rate downgrades for South Africa by the global ratings agencies.

Between June and July, the BETI declined by 0.2%. This, however, is minor in comparison to other monthly declines since 2015.

In July, the number of transactions increased by 6.7% on a year-on-year basis but the average value per transaction declined by 1.3% on a year-on-year basis. The standardised value of transactions for July was R789.2 billion, a 5.4% year-on-year upturn.

In the last 43 months, 21 of the monthly changes in the BETI have been declines and one month had no change, while the other 21 months showed increases. These are all indicative of a flat economy, according to Schüssler.

He concludes: “There is hope that further interest rate reductions will boost consumer confidence and a better understanding of the economic situation by policymakers will help the South African economy.”

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